Case 1:17-cv-00585-CFC-SRF Document 147 Filed 10/03/18 Page 1 of 16 PageID #: 4972
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`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`Civil Action No. 17-585-CFC-SRF
`
`
`
`
`
`
`UNIVERSAL SECURE REGISTRY, LLC,
`
`
`Plaintiff,
`
`vs.
`
`APPLE INC., VISA INC., and VISA U.S.A., INC.,
`
`
`Defendants.
`
`
`
`
`
`
`
`DEFENDANTS APPLE INC., VISA INC., AND VISA U.S.A., INC.’S OBJECTIONS TO
`THE SEPTEMBER 19, 2018 REPORT AND RECOMMENDATION
`
`Frederick L. Cottrell, III (#2555)
`Jason J. Rawnsley (#5379)
`RICHARDS, LAYTON & FINGER, P.A.
`920 North King Street
`Wilmington, DE 19801
`(302) 651-7700
`cottrell@rlf.com
`rawnsley@rlf.com
`
`OF COUNSEL:
`
`Mark D. Selwyn
`Liv Herriot
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`950 Page Mill Road
`Palo Alto, CA 94304
`(650) 858-6000
`
`Monica Grewal
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`60 State Street
`Boston, MA 02109
`(202) 663-6000
`
`
`David E. Moore (#3983)
`Bindu Palapura (#5370)
`POTTER ANDERSON CORROON LLP
`1313 North Market Street 6th Floor
`Wilmington, DE 19801
`(302) 984-6147
`dmoore@potteranderson.com
`bpalapura@potteranderson.com
`
`OF COUNSEL:
`
`James C. Yoon
`Jamie Y. Otto
`Jacqueline Lyandres
`WILSON SONSINI GOODRICH & ROSATI
`650 Page Mill Road
`Palo Alto CA 94304-1050
`Tel: (650) 493-9300
`
`Lucy Yen
`WILSON SONSINI GOODRICH & ROSATI
`1301 Avenue of the Americas, 40th Floor
`New York, NY 10019
`Tel: (212) 497-7755
`
`
`
`
`

`

`Case 1:17-cv-00585-CFC-SRF Document 147 Filed 10/03/18 Page 2 of 16 PageID #: 4973
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`
`Derek A. Gosma
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`350 South Grand Avenue, Suite 2100
`Los Angeles, CA 90071
`(213) 443-5300
`
`Attorneys for Defendant Apple Inc.
`
`Dated: October 3, 2018
`
`
`
`Ian Liston (#5507)
`WILSON SONSINI GOODRICH & ROSATI
`222 Delaware Avenue, Suite 800
`Wilmington, DE 19801
`Tel: (302) 304-7600
`
`Attorneys for Defendants Visa Inc. and
`Visa U.S.A., Inc.
`
`
`
`
`
`
`
`
`
`
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`

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`Case 1:17-cv-00585-CFC-SRF Document 147 Filed 10/03/18 Page 3 of 16 PageID #: 4974
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`
`TABLE OF CONTENTS
`
`I.
`
`INTRODUCTION ....................................................................................................................1
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`II. STANDARD OF REVIEW ......................................................................................................2
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`III. THE COURT SHOULD RULE THE ASSERTED CLAIMS ARE INVALID ......................2
`
`A. The Asserted Claims Are Not Directed to an Improvement in Computer Functionality ....2
`
`B. The R&R Confuses the Alice Step 2 Analysis with Alice Step 1 .......................................5
`
`C. The R&R Fails to Follow Supreme Court and Federal Circuit Precedent ...........................6
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`D. The R&R Failed to Analyze the Asserted Patents at Alice Step 2 ......................................7
`
`E. The Asserted Claims Are Directed to an Unpatentable Mental Process .............................8
`
`IV. THE COURT SHOULD GRANT TRANSFER TO N.D. CAL ..............................................8
`
`V. CONCLUSION ......................................................................................................................10
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`
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`
`
`i
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`Case 1:17-cv-00585-CFC-SRF Document 147 Filed 10/03/18 Page 4 of 16 PageID #: 4975
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`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`
`Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253 (Fed. Cir. 2016) ...........................5
`
`Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) .................................................. passim
`
`Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, No. 15-1168-PLS-CJB, 2016 WL
`8677211 (D. Del Sept. 23, 2016) .......................................................................................10
`
`Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir. 2016) ..............................5
`
`Asghari-Kamrani v. United Servs. Auto Ass’n, No. 15-cv-478, 2016 WL 3670804
`(E.D. Va. July 5, 2016), aff’d, 2018 WL 4352098 (Fed. Cir. Sept. 11,
`2018) ............................................................................................................................1, 7, 8
`
`Bascom Glob. Internet Svcs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed.
`Cir. 2016) .............................................................................................................................5
`
`Blackbird Tech LLC v. Cloudflare, Inc., No. 17-283, 2017 WL 4543783 (D. Del.
`Oct. 11, 2017) ......................................................................................................................9
`
`BSG Tech LLC v. Buyseasons Inc., 899 F.3d 1281 (Fed. Cir. 2018) ...............................................3
`
`Contour IP Holding, LLC v. GoPro, Inc., No. 15-1108-LPS-CJB, 2017 WL
`3189005 (D. Del. July 6, 2017), order adopted by 2017 WL 3225983 .........................9, 10
`
`Cruise Control Techs. LLC v. Chrysler Grp. LLC, No. 12-1755-GMS, 2014 WL
`1304820 (D. Del. Mar. 31, 2014).........................................................................................9
`
`CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) ..............................8
`
`Elec. Power Grp. LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016) ......................................2, 6
`
`Enfish LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) .................................................4, 5
`
`In re HP Inc., No. 2018-149 (Fed. Cir. Sept. 25, 2018) ................................................................10
`
`In re Link_A_Media, 662 F.3d 1221, 1223 (Fed. Cir. 2011) ...........................................................8
`
`Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363 (Fed. Cir.
`2017) ....................................................................................................................................3
`
`IQS US Inc. v. Calsoft Labs Inc., No. 16-CV-7774, 2017 WL 3581162 (N.D. Ill.
`Aug. 18, 2017) ....................................................................................................................7
`
`
`
`ii
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`Ithaca Ventures k.s. v. Nintendo of Am. Inc., No. 13-824-GMS, 2014 WL
`4829027 (D. Del. Sept. 25, 2014) ......................................................................................10
`
`Kinglite Holdings, Inc. v. Micro-Star Int’l Co. Ltd, 2015 WL 6437836 (C.D. Cal.
`2015) ....................................................................................................................................7
`
`MacQueen v. Warren Pumps LLC, 246 F. Supp. 3d 1004 (D. Del. Mar. 31, 2017) ........................2
`
`Mitel Networks Corp. v. Facebook, Inc., 943 F. Supp. 2d 463 (D. Del. 2013) .............................10
`
`OpenTV, Inc. v. Netflix, Inc., No. 12-1733-GMS, 2014 WL 1292790 (D. Del.
`Mar. 31, 2014)................................................................................................................8, 10
`
`SAP Am., Inc. v. Investpic, LLC, 898 F.3d 1161 (Fed. Cir. 2018) ...................................................2
`
`Secured Mail Solutions v. Universal Wilde, Inc., 873 F.3d 905 (Fed. Cir. 2017) ...........................6
`
`Smart Sys. Innovations LLC v. Chicago Transit Auth., 873 F.3d 1364 (Fed. Cir.
`2017) ....................................................................................................................................6
`
`Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (Fed. Cir. 2017) .....................................4, 5
`
`STATUTES, RULES, AND REGULATIONS
`
`28 U.S.C. § 1404(a) .........................................................................................................................9
`
`35 U.S.C. § 101 ...................................................................................................................... passim
`
`
`
`iii
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`I.
`
`INTRODUCTION
`
`The Magistrate Judge’s September 19, 2018 Report and Recommendation (“R&R”)
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`misinterprets and misapplies Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), in
`
`several fundamental ways. First, the R&R errs by finding that the asserted claims are directed to
`
`an “improvement in computer functionality” under Alice Step 1 where (1) the claims do not
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`purport to improve any computer functionality but, at most, use general purpose computers as
`
`tools, and (2) the specification repeatedly emphasizes the generic and conventional nature of the
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`computer system and all its software and hardware, including the USR database. Tellingly, even
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`USR did not argue to the Magistrate Judge that the asserted claims are directed to improvements
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`in computer functionality. They are not; the claims are directed to transaction security.
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`Second, the R&R compounds its error with respect to the ’826, ’137, and ’813 patents by
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`considering, at Alice Step 1, whether the claim elements, considered individually and as an
`
`ordered combination, claim an inventive concept. In doing so, the R&R confuses the Step 2
`
`analysis with Step 1, turning Alice on its head. Alice holds that, at Step 1, the court must not
`
`mistake the performance of an abstract concept by a computer for a patent-eligible invention.
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`Yet the R&R points only to the presence of claim elements describing generic computer
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`components as rendering the claims allegedly “directed to” an improvement to computers.
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`Third, although the R&R acknowledges that the asserted claims seek to improve
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`transaction security, it fails to properly apply precedent to claims directed to such business
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`methods. Alice and numerous Federal Circuit cases found nearly identical concepts to be
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`abstract. Indeed, the Federal Circuit recently affirmed a decision invalidating claims “directed to
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`the abstract idea of using a third party and a random, time-sensitive code to confirm the identity
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`of a participant to a transaction.” Asghari-Kamrani v. United Servs. Auto Ass’n, No. 15-cv-478,
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`2016 WL 3670804 (E.D. Va. July 5, 2016), aff’d, 737 Fed. Appx. 539 (Fed. Cir. Sept. 11, 2018).
`1
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`Fourth, after performing its flawed evaluation of the asserted claims at Alice Step 1, the
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`R&R does not address Step 2. The asserted claims also fail at that step.
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`Fifth, the R&R errs by failing even to consider whether the asserted claims are directed
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`to an unpatentable mental process. Had the R&R done such an analysis, it would have
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`confirmed the abstract nature of the asserted claims.
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`The R&R also errs in denying Defendants’ Motion to Transfer as set forth below.
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`II.
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`STANDARD OF REVIEW
`
`“A district judge is charged with conducting a de novo review of a magistrate judge’s
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`report and recommendation to which specific, written objections are made.” MacQueen v.
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`Warren Pumps LLC, 246 F. Supp. 3d 1004, 1006 (D. Del. Mar. 31, 2017).
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`III. THE COURT SHOULD RULE THE ASSERTED CLAIMS ARE INVALID
`A.
`
`The Asserted Claims Are Not Directed to an Improvement in Computer
`Functionality.
`
`The Federal Circuit has distinguished between claims directed to improvements to
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`computer functionality (potentially patent-eligible), and “claims that do not ‘focus ... on [ ] an
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`improvement in computers as tools, but on certain independently abstract ideas that use
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`computers as tools’” (not patent eligible). SAP Am., Inc. v. Investpic, LLC, 898 F.3d 1161, 1168
`
`(Fed. Cir. 2018) (citing Elec. Power Grp. LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir.
`
`2016)). Here, the asserted claims use computers as tools to carry out the abstract process of
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`verifying identity before enabling a transaction, and therefore fall into the second category.
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`Concluding without support that the asserted claims are directed to an improvement in
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`computer functionality, the R&R never identifies any cognizable improvement in computer
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`functionality in any asserted claim. For the ’539 patent, the R&R indicates that the purported
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`improvement is “enabling anonymous identification” and the use of a “time-varying code” (R&R
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`2
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`at 18). However, any such improvement is by its own terms not patent-eligible as an
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`improvement to a computer, but at most presents a purportedly novel, though non-patent-eligible
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`transaction security concept. For the other patents, the R&R describes the improvement as “a
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`more secure authentication system” (’826 patent, R&R at 20) or a “more secure mobile
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`transaction authentication system” (’137 and ’813 patents, R&R at 22, 23). Such alleged
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`“improvements” are, again, not even arguably directed to computer functionality but are – at best
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`– a computer-implemented transaction security technique. In all four patents, computers are
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`used as tools, which the specification admits are commercially available. See, e.g., ’539 patent at
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`8:17-23 (“a SecureID card available from RSA Security . . . retrieves . . . a time-varying value”).
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`Thus, the claims are directed to abstract concepts that use computers as tools, and the
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`R&R errs in finding that they focus on an improvement to the computer itself. See, e.g., BSG
`
`Tech LLC v. Buyseasons Inc., 899 F.3d 1281, 1288 (Fed. Cir. 2018) (database patent invalid
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`under § 101 because “[w]hile the [claimed invention] improves the quality of the information
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`added to the database, an improvement to the information stored by a database is not equivalent
`
`to an improvement in the database’s functionality”); Intellectual Ventures I LLC v. Capital One
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`Bank (USA), 792 F.3d 1363, 1368-69 (Fed. Cir. 2017) (computer-implemented budgeting
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`method was still abstract, despite purportedly making budgeting easier and more efficient).
`
`Indeed, the R&R acknowledges three times that the asserted claims involve “generic”
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`computer components. R&R at 20 (“certain elements of claim 10 recite generic steps of
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`authenticating a user based on biometric information”), 22 (“certain elements of claim 12 recite
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`generic computer components”), 24 (“certain elements of claim 1 recite generic computer
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`components”). Similarly, the specifications go to great length to emphasize that the computer
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`system, including all its software and hardware, is conventional. For example, the specifications
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`3
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`state that the claims can be implemented in “a general purpose computer system” (’539 patent at
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`5:63-64) including off-the-shelf components, such as “a commercially available processor”
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`running “any . . . commercially available operating system” (id. at 6:4-10). Nor do the patents
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`claim any improvements in database technology or encryption. The database “may be any kind
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`of database” (id. at 6:18-20), and the transmission of data may be encrypted using any
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`“conventional symmetric or asymmetric encryption algorithm.” (Id. at 7:27-29).
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`The R&R relies upon Enfish LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016), and
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`Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (Fed. Cir. 2017), but comparing the
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`inventions at issue in those cases to the asserted patents demonstrates the R&R’s error. In
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`Enfish, the Federal Circuit considered claims covering a new type of self-referential database that
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`allowed for “faster searching of data” and “more effective storage” than prior art databases.
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`Enfish, 822 F.3d at 1333. The court held that the self-referential database patents at issue were
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`not abstract because the claimed searching and storage benefits focused on an “improvement to
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`computer functionality itself, not on economic or other tasks for which a computer is used in its
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`ordinary capacity.” Id. at 1336. In stark contrast, the asserted patents emphasize that the USR
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`database “may be any kind of database” (’539 patent, at 6:18-20; see also 7:53-55 (“the
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`invention is not limited to a particular manner of organizing the data within the database”)).
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`Similarly, in Visual Memory, the Federal Circuit considered whether claims for an
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`improved computer memory system that “can be tailored for use with multiple different
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`processors without [a] reduction in performance” are directed to patentable subject matter or an
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`abstract idea. Visual Memory, 867 F.3d at 1255. The court, relying in part on the reasoning of
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`Enfish, found the patents were valid because they were “directed to an improved computer
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`memory system, not to the abstract idea of categorical data storage.” Id. at 1259-1260. Again, in
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`4
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`stark contrast, the asserted patents are directed to improving payment security and describe the
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`memory system for the USR database as wholly conventional, emphasizing that “the USR
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`database may be included in any aspect of the memory system” (’539 patent, at 5:56-62).
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`Unlike the patents at issue in Enfish and Visual Memory, the asserted patents utilizing any
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`conventional computer system are not directed to improving the functionality of that system. See
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`Visual Memory, 867 F.3d at 1260 (contrasting claims directed to “computer functionality itself”
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`rather than on “economic or other task for which a computer is used in its ordinary capacity”).
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`B.
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`The R&R Confuses the Alice Step 2 Analysis with Alice Step 1.
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`As the R&R correctly states, Alice requires a two-step analysis, in which the court first
`
`determines whether the claims at issue are directed to an abstract concept (Alice Step 1) and, if
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`so, proceeds next to seek to identify a non-abstract “inventive concept” (at Alice Step 2) in any
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`non-abstract element or combination of elements of the claims. (R&R at 13.) But after correctly
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`stating the two steps required under Alice, the R&R immediately confuses them. While Alice
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`Step 1 is supposed to look at the “focus of the claimed advance over the prior art to determine if
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`the claim’s ‘character as a whole’ is directed to excluded subject matter,” Affinity Labs of Texas,
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`LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016), the R&R fails to do that. Instead,
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`relying on Alice Step 2 decisions, the R&R concludes that individual claim elements reciting
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`computer technology “individually or as an ordered combination” render the claims “directed to”
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`an improvement in computer technology. See, e.g., R&R at 22, 24 (relying on the portion of
`
`Alice opinion directed to Step 2 and Bascom Glob. Internet Svcs., Inc. v. AT&T Mobility LLC,
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`827 F.3d 1341 (Fed. Cir. 2016), a case decided solely at Step 2); id. at 20 (citing Amdocs (Israel)
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`Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir. 2016) (assuming that claims failed at Step
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`1 but finding that they included an ‘inventive concept’ at Alice Step 2). This is exactly the type
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`of analysis that Alice itself rejects. See Alice, 134 S. Ct. at 2356-57.
`5
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`The problem with disregarding the Step 1 analysis is that it can lead – as it did in the
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`R&R – to mistaking a purportedly novel (but not patent eligible) concept that uses computers for
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`a patent-eligible technological improvement. Elec. Power Grp., 830 F.3d at 1353 (“[W]e have
`
`described the first-stage inquiry as looking at the ‘focus’ of the claims, their ‘“character as a
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`whole,”’ and the second-stage inquiry (where reached) as looking more precisely at what the
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`claim elements add—specifically, whether … they identify an ‘“inventive concept”’ in the
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`application of the ineligible matter to which (by assumption at stage two) the claim is directed.”).
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`C.
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` The R&R Fails to Follow Supreme Court and Federal Circuit Precedent.
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`The R&R also fails to adhere to analogous Federal Circuit and Supreme Court decisions
`
`holding that claims purporting to improve information security or the security of transactions –
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`even those that are limited to specific technological environments – are directed to an abstract
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`concept at Alice Step 1. See, e.g., Alice, 134 S. Ct. at 2357 (holding that claims written to a
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`method for conducting financial transactions using a computer are directed to an abstract idea).
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`Secured Mail Solutions v. Universal Wilde, Inc., 873 F.3d 905, 907 (Fed. Cir. 2017), is
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`illustrative. There, the Federal Circuit found that the claims were directed to the idea of
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`“verifying the authenticity of [a] mail object,” even though all claims recited detailed
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`descriptions of the technological methods used to achieve that concept. See, e.g., id. at 908
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`(claims describing a mail object, processor, barcode, reception device with a screen, and
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`network). As the Federal Circuit reasoned, “the claims … are not directed to specific details of
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`the barcode or the equipment for generating and processing it,” even though detailed descriptions
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`of computer technology were included in the claims. Id. at 909. Similarly here, the asserted
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`claims are not directed to specific details of any computer components, much less to any
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`improvements to them; rather, the asserted claims only use ordinary computers as tools to verify
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`an identity, which is an abstract concept. See also Smart Sys. Innovations LLC v. Chicago
`6
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`Transit Auth., 873 F.3d 1364 (Fed. Cir. 2017) (system for conducting transactions in a transit
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`system unpatentable under §101); Kinglite Holdings, Inc. v. Micro-Star Int’l Co. Ltd., No. CV
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`14-03009, 2015 WL 6437836, at *8 (C.D. Cal. Oct. 16, 2015) (invalidating patents that
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`“implicate the concept of authentication or verification of a request”); IQS US Inc. v. Calsoft
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`Labs Inc., No. 16-CV-7774, 2017 WL 3581162, at *5 (N.D. Ill. Aug. 18, 2017) (invalidating
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`patent for biometric authentication via comparison with database entry).
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`Likewise, the Federal Circuit’s recent summary affirmance of the district court’s opinion
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`in Asghari-Kamrani, 2016 WL 3670804, aff’d, 2018 WL 4352098, is highly instructive.
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`Asghari-Kamrani involved a patent directed to the same subject matter as the asserted patents: a
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`computer-implemented system for authenticating user identity with a remote database by using a
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`time-varying code as a proxy for a user’s actual account information. Id. at *1-2; compare id. at
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`5 (describing representative method claims) with R&R at 17-18, 19-20, 21, 23 (describing
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`asserted claims). At Alice Step 1, the court found that the claims were “directed to the abstract
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`idea of using a third party and a random, time-sensitive code to confirm the identity of a
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`participant to a transaction,” explaining that although the patent involved the use of computers,
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`“the patent claims are directed to a common method for solving an old problem.” Id. at *4. The
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`court concluded by finding (at Alice Step 2) that the claim elements considered as a whole “do
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`not add anything inventive to the abstract concept underlying them [but] simply instruct a
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`generic computer . . . to verify the identity of a participant to a transaction using a randomly
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`generated code.” Id. at *5. In this case, the R&R recognized that the asserted claims are directed
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`to a substantially identical authentication system. (R&R at 18, 20, 22, 24.)
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`D.
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`The R&R Failed to Analyze the Asserted Patents at Alice Step 2.
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`7
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`Because it erroneously concluded that the asserted claims are not directed to an abstract
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`concept at Alice Step 1, the R&R does not perform an Alice Step 2 analysis. For the reasons set
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`forth in Defendants’ briefing (D.I. 17, 37), the asserted patents fail Alice Step 2 and are invalid.
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`E.
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`The Asserted Claims Are Directed to an Unpatentable Mental Process.
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`The R&R failed to consider whether the asserted claims are invalid because the steps can
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`“easily be performed either by hand or, more simply, with technologies much older than
`
`computers.” Asghari-Kamrani, 2016 WL 3670804, at *4; see also CyberSource Corp. v. Retail
`
`Decisions, Inc., 654 F.3d 1366, 1372-73 (Fed. Cir. 2011) (claim whose “steps can be performed
`
`in the human mind, or by a human using a pen and paper” is directed to an “unpatentable mental
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`process[ ]”). Indeed, USR’s opposition brief to the Magistrate Judge did not dispute that its
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`claims described a process that could be performed in the human mind.
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`IV.
`
`THE COURT SHOULD GRANT TRANSFER TO N.D. CAL.
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`As Defendants’ Opening Brief and Reply Brief (D.I. 22, 38) demonstrate, the public and
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`private factors strongly support transfer. Fundamentally, there is no connection between
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`Delaware and the parties or any relevant facts, other than Visa’s incorporation in Delaware and
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`that Visa and Apple do business in Delaware (as they do in every state).
`
`The Parties’ Forum Preference Favors Transfer. A Massachusetts LLC, USR is based
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`in Massachusetts, and has no connection with Delaware. Although the R&R correctly finds that
`
`Delaware is not USR’s “home forum” (R&R at 5-6), the R&R errs by effectively making USR’s
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`forum preference dispositive. See In re Link_A_Media, 662 F.3d 1221, 1223 (Fed. Cir. 2011)
`
`(“district court’s fundamental error was making [Plaintiff’s] choice of forum and …
`
`[Defendant’s] incorporation in Delaware effectively dispositive”). Because USR’s forum choice
`
`is entitled to limited deference, it does not outweigh Defendants’ preference here. See OpenTV,
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`Inc. v. Netflix, Inc., No. 12-1733-GMS, 2014 WL 1292790, at *1-2 (D. Del. Mar. 31, 2014).
`
`
`
`8
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`

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`Case 1:17-cv-00585-CFC-SRF Document 147 Filed 10/03/18 Page 14 of 16 PageID #: 4985
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`The Location Where the Claim Arose Favors Transfer. The claim arose in N.D. Cal.,
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`where Apple and Visa designed and developed the accused products and services. See Contour
`
`IP Holding, LLC v. GoPro, Inc., No. 15-1108-LPS-CJB, 2017 WL 3189005, at *9 (D. Del. July
`
`6, 2017) (factor “typically focuses on the location of the production, design and manufacture of”
`
`accused products), order adopted by 2017 WL 3225983, at *2; Jaynes Decl., D.I. 23, ¶¶7-9;
`
`Carpenter Decl., D.I. 25, ¶¶6-8; Sharp Decl., D.I. 39, ¶¶4-5. No relevant activity occurred in
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`Delaware. Jaynes Decl., ¶10; Carpenter Decl. ¶4. The R&R errs by focusing on the sale of
`
`accused products nationwide, including in Delaware, as a basis for where the claim arose. (R&R
`
`at 6-7.)
`
`The Convenience of the Parties Favors Transfer. The R&R incorrectly concludes that
`
`because “Apple and Visa are large, wealthy corporations who engage in business throughout the
`
`United States,” “‘transfer is almost always inappropriate.’” (R&R at 7.) Nothing in 28 U.S.C. §
`
`1404(a) focuses on a party’s size or wealth, and the R&R’s logic would effectively mean that
`
`“large, wealthy corporations” could never satisfy the factors for transfer. See Cruise Control
`
`Techs. LLC v. Chrysler Grp. LLC, No. 12-1755-GMS, 2014 WL 1304820, at *3-4 (D. Del. Mar.
`
`31, 2014) (“The fact that the Defendants possess vast resources, however, does not mean that the
`
`court should follow an approach that would unnecessarily waste these resources”); Selwyn Decl.,
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`D.I. 24, ¶¶9-11, Ex. H. The R&R also errs in deferring to Dr. Weiss’s personal convenience,
`
`when USR could have sued in Boston, less than ten miles from his home. In addition, USR
`
`failed to demonstrate a material difference in travel time between the train from Boston to
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`Delaware and a plane to the Bay Area. See Selwyn Reply Decl., D.I. 40, ¶¶3-4, Exs. 2-3;
`
`Blackbird Tech LLC v. Cloudflare, Inc., No. 17-283, 2017 WL 4543783, at *8 (D. Del. Oct. 11,
`
`2017) (factor favors transfer to California where all of plaintiff’s offices and employees were in
`
`
`
`9
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`

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`Case 1:17-cv-00585-CFC-SRF Document 147 Filed 10/03/18 Page 15 of 16 PageID #: 4986
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`Massachusetts because plaintiff’s employees will have to travel regardless).
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`The Convenience of the Witnesses Favors Transfer. The R&R errs in finding this factor
`
`neutral. Defendants identified six prior art witnesses subject to N.D. Cal.’s subpoena power
`
`(Selwyn Decl. ¶¶13-19, Exs. I-Q), and “there is reason to believe that those witnesses will refuse
`
`to testify absent subpoena power” as they have no relationship to any party. Ithaca Ventures k.s.
`
`v. Nintendo of Am. Inc., No. 13-824-GMS, 2014 WL 4829027, at *5 (D. Del. Sept. 25, 2014); see
`
`also In re HP Inc., No. 2018-149, slip op. at 5-6 (Fed. Cir. Sept. 25, 2018) (defendant not
`
`required to “affirmatively indicate that it would call those [third party] witnesses or the nature of
`
`the testimony they would give”). By contrast, there is reason to believe Mr. Brainard, an
`
`“independent technology consultant to USR and USR ID Inc.” “would cooperate by providing
`
`live testimony at trial” in California. Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, No. 15-
`
`1168-LPS-CJB, 2016 WL 8677211, at *9 (D. Del Sept. 23, 2016); see also HP, No. 2018-149,
`
`slip op. at 7 (comparison between forums “is not altered by the presence of other witnesses” in
`
`neither forum (internal quotations omitted)).
`
`The Practical Considerations and Local Interest Factors Favor Transfer. The R&R
`
`errs in finding these factors neutral. Defendants did not “double count” their arguments. In fact,
`
`USR never disputed that the “aggregate litigation costs would be reduced by litigating in
`
`California.” See Mitel Networks Corp. v. Facebook, Inc., 943 F. Supp. 2d 463, 475-76 (D. Del.
`
`2013); see also Contour, 2017 WL 3189005, at *13 (acknowledging “additional cost of retaining
`
`Delaware counsel”). N.D. Cal. has a stronger interest because the accused products were
`
`designed and developed there. OpenTV, 2014 WL 1292790, at *4.
`
`V.
`
`CONCLUSION
`
`For the foregoing reasons, the R&R should be rejected and Defendants’ Motions to Dismiss
`
`and Transfer should be granted.
`
`
`
`
`
`10
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`

`

`Case 1:17-cv-00585-CFC-SRF Document 147 Filed 10/03/18 Page 16 of 16 PageID #: 4987
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`
`
`
`
` /s/ Jason J. Rawnsley
`Frederick L. Cottrell, III (#2555)
`Jason J. Rawnsley (#5379)
`RICHARDS, LAYTON & FINGER, P.A.
`920 North King Street
`Wilmington, DE 19801
`(302) 651-7700
`cottrell@rlf.com
`rawnsley@rlf.com
`
`Attorneys for Defendant Apple Inc.
`
`OF COUNSEL:
`
`Mark D. Selwyn
`Liv Herriot
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`950 Page Mill Road
`Palo Alto, CA 94304
`(650) 858-6000
`
`Monica Grewal
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`60 State Street
`Boston, MA 02109
`(202) 663-6000
`
`Derek A. Gosma
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`350 South Grand Avenue, Suite 2100
`Los Angeles, CA 90071
`(213) 443-5300
`
`Dated: October 3, 2018
`
`
`
`
`
`
`
`
`
`
`
`/s/ Bindu Palapura
`David E. Moore (#3983)
`Bindu Palapura (#5370)
`POTTER ANDERSON CORROON LLP
`1313 North Market Street 6th Floor
`Wilmington, DE 19801
`(302) 984-6147
`dmoore@potteranderson.com
`bpalapura@potteranderson.com
`
`Attorneys for Defendants Visa Inc. and
`Visa U.S.A., Inc.
`
`OF COUNSEL:
`
`James C. Yoon
`Jamie Y. Otto
`Jacqueline Lyandres
`WILSON SONSINI GOODRICH & ROSATI
`650 Page Mill Road
`Palo Alto CA 94304-1050
`Tel: (650) 493-9300
`
`Lucy Yen
`WILSON SONSINI GOODRICH & ROSATI
`1301 Avenue of the Americas, 40th Floor
`New York, NY 10019
`Tel: (212) 497-7755
`
`Ian Liston (#5507)
`WILSON SONSINI GOODRICH & ROSATI
`222 Delaware Avenue, Suite 800
`Wilmington, DE 19801
`Tel: (302) 304-7600
`
`
`11
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`